Stanley Black & Decker downgraded to Equalweight by Barclays

Barclays analysts have downgraded Stanley Black & Decker (SWK) shares to Equalweight from an Overweight rating. The Morning Brief's Madison Mills and Brad Smith comment on how US consumer trends are impacting the hardware and tool manufacturer.

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This post was written by Luke Carberry Mogan.

Video transcript

Shares of Stanley Black and Decker moving lower this morning after Barclays downgraded the stock to equal weight from overweight, the analysts behind the downgrade, saying the current trading levels are too high to be justified.

Meanwhile, US imposed tariffs on Chinese imported products could also hurt sales.

We're taking a look at the shares.

They are down by about 1.7% here this morning.

And it was an interesting call that came out from Barclays this morning, um, and downgrading the stock from equal or to equal weight from overweight and then additionally here, um, one of the huge things the sluggish sales likely to be a key headwind to the rapid EPS growth that was predicted here.

Yeah, this implies a 1% drop from Stanley's current market value and level, and it's another example right of what we're seeing in terms of consumer behaviour having a negative impact on some of these names you can see.

Year to date, the stock is down over 11% and that makes a lot of sense when you consider that the housing market is sort of in a standstill right now, as interest rates continue to be higher for longer.

People are staying in their homes longer.

It's the same thing that's impacting some of the companies like Lowe's Home Depot.

These other home renovation related names are having a negative impact because of staying in their homes for longer.

There's just not a tonne to be done in the tool buying space for all of your home renovation.

Yeah, yeah.

What is the tool Replenishment rate?

III.

I don't know.

I don't want a business where you only need to buy it once in your lifetime.

I mean, yeah.

No, I've had the same screwdriver for the last four years here, So, um, I'm impressed that you own a screwdriver.

I don't own it.

The power one you gotta have.

You gotta have a power one.

You just have to It's got to be portable, too.